Bill C-282

An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management)

This enactment amends the Department of Foreign Affairs, Trade and Development Act so that the Minister of Foreign Affairs cannot make certain commitments with respect to international trade regarding certain goods.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call this meeting to order.

This is meeting number 56 of the Standing Committee on International Trade.

Today's meeting is taking place in a hybrid format pursuant to the House order of June 23, 2022. Therefore, members are attending in person in the room and remotely using the Zoom application.

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Today we are meeting for clause-by-clause consideration of Bill C-282, an act to amend the Department of Foreign Affairs, Trade and Development Act (supply management).

Welcome to all the officials who are here at this particular moment.

I've had Mr. Virani indicate that he wanted to speak, and I have Mr. Seeback. Before I introduce the officials, I'll refer to you, Mr. Virani, for a moment.

[Mary Ng, Liberal, Markham—Thornhill, ON]

What I've said, and what our government has been clear about, is that we will not be providing access to supply-managed sectors in any future free trade agreements. That is a commitment that this government has made to the supply-managed sector in Canada.

I don't know if the member is saying to me that they're no longer supporting Bill C-282, because you have been supporting Bill C-282, as have the rest of us.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I'd appreciate it if you could check on that, because this isn't the first time we've contacted your office.

Now I'd like to get back to free trade agreements. In your opinion, if Bill C‑282 passes, would it make it harder to negotiate other free trade agreements?

[Paulin Bouchard]

We have had a lot of consultation during the study on the former Bill C‑216 and the current Bill C‑282. I firmly believe that our elected officials should send a clear signal on what we can put or not put on the negotiating table. As I said earlier, negotiators will do their job and will create wealth through these agreements.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Here's my concern. Earlier on, it was the Canadian Canola Growers Association that talked about how predictability and stability would be lost if Bill C-282 was implemented. However, we are hearing the supply-managed sectors talk about predictability and stability being gained by having this legislation. How do we reconcile those two competing parts?

Here at committee, we have had eight organizations come forward. We've had Pulse Canada, the Grain Growers of Canada, the National Cattle Feeders’ Association, the Canadian Cattle Association and the Canadian Agri-Food Trade Alliance. Today, three organizations—the Canadian Canola Growers Association, the International Cheese Council of Canada and the Canola Council of Canada—have brought forward their concerns.

I'm asking, from your standpoint, whether you believe that it would benefit this committee to hear more testimony from organizations on both sides, as well as trade experts, to advise this committee on the proper steps we should be taking to ensure that any legislation we have is the best piece of legislation we can implement.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being with us today.

I want to build upon what my colleague mentioned earlier today. Several of us around this table support the supply management sector. In fact, I had meetings with the Dairy Farmers of Ontario just the other day in my office. In fact, I had the opportunity to work for the Dairy Farmers of Ontario.

Having said that, we are here to look at Bill C-282 and reconcile the two different kinds of visions that we're seeing here today.

I'm going to go to Mr. Sherman first.

Did the sponsor of the legislation reach out to your organization to seek feedback on this potential legislation?

[Paulin Bouchard, President, Fédération des producteurs d’œufs du Québec]

Thank you, Madam Chair. Good afternoon, everyone. Thank you for the invitation.

I am Paulin Bouchard, president of the Fédération des producteurs d'œufs du Québec. I am here with our vice-president, Mr. Sylvain Lapierre. We are both egg producers from Quebec.

Our federation represents 199 producers whose 5.7 million laying hens produce 1.8 billion eggs per year. We also represent the interests of 108 replacement chicken producers and six egg producers who work for the vaccine sector, that is to say a pharmaceutical company that is involved in protecting Canadians' health.

Right now, all the federal parties and witnesses are saying that they support supply management, but for different reasons. On the one side, we have MPs that support Bill C‑282 to protect supply management production from any more concessions of our market shares to foreign producers. These MPs know that the advantages for Canadian consumers and citizens are better than what we could hope to gain during the negotiation of any future trade deals.

On the other side, when we look at the testimony provided by witnesses at previous meetings, we see that for others, the supply management system is just a trade currency that is used by Canadian negotiators. Indeed, we get the message that those MPs believe in supply management, because the protected markets are useful aces in the hole that Canadian negotiators can use to deal with foreign negotiators over domestic market shares.

You have heard previous witnesses state that without this ace up their sleeves, Canadian negotiators would be sitting ducks at negotiations. That is basically saying that Canadian negotiators have nothing to bargain with, contrary to their foreign counterparts, and would not be able to gain any concessions without this ace. It makes us wonder what negotiators from other countries do when they don't have supply managed markets.

I would remind you that it is possible to hammer out trade deals without sacrificing supply‑managed production. Canada has signed 12 trade agreements since 1997 and has negotiated with 15 countries, without giving any access to its domestic markets. Why do Canadian negotiators feel such a need to trade our protected markets whereas American and Japanese negotiators are able to make gains without putting their rice, sugar and cotton markets on the negotiating table?

During your committee meetings, witnesses and MPs have been unable to provide statistics on Canada's revenue and exports volumes after conceding market shares to foreign exporters. Supply management producers can provide figures for their losses, and Canadian taxpayers can say how much they have had to pay to compensate for the concessions made.

If Bill C‑282 had been passed at the beginning of this century, we would have never conceded our market shares. Bill C‑282 is a necessary tool to protect Canadian citizens and consumers and a system that everyone benefits from. Voting against Bill C‑282 is voting for individual interests as opposed to collective ones and sacrificing our production during the next round of negotiations.

Madam Chair, everything has been said during the meetings held on Bills C-216and C‑282. Quebec's egg producers are asking parliamentarians—

[Troy Sherman, Director, Government Relations, Canola Council of Canada]

Thank you, Chair Sgro and members of the committee.

My name is Troy Sherman, and I am the director of government relations for the Canola Council of Canada. The council encompasses all links in the canola value chain. Our members include canola growers, life science companies, grain handlers, exporters, processors and others. Our shared goal is ensuring the industry's continued growth and success, and doing so by meeting global demand for canola and canola-based products, which include food, feed and fuel.

Canola's success is Canada's success. Our industry represents almost $30 billion in economic activity, annually, 207,000 jobs across the country, $12 billion in wages and the largest share of farm cash receipts in the country. With over 90% of Canadian canola exported to as many as 50 different markets, the canola industry depends on ambitious and fair science- and rules-based trade.

For many years, we have worked with Canada's trade negotiators to make sure Canada and Canadian canola are well positioned to help feed the world. Central to these trade negotiations is the foundational principle that negotiators should be empowered to reach the best agreements for Canadians and the Canadian economy. Negotiators have been able to achieve this by availing themselves of all the tools in our trade-negotiating tool box, working closely with industry, academics and civil society to ensure Canada's trade agreements achieve what is in our national interest.

Bill C-282 risks undermining Canada's reputation as a trading nation and, consequently, our national interest during trade negotiations. It does this in a number of ways, including putting in place legislative prohibitions on what our negotiators can discuss at the negotiation table and diminishing Canada's desirability as a market with which to pursue trade agreements.

On the first point, Bill C-282 proposes prohibiting what Canada's trade negotiators can discuss at the negotiation table. To the best of our knowledge, and as noted by officials at Global Affairs Canada, no other country legislatively prohibits negotiators from discussing certain topics during trade negotiations. Canada would be an outlier, and needlessly so.

In June 2021, an official from Global Affairs appeared before this very committee on Bill C-216, Bill C-282's predecessor. At the time, they stated the following: “Canada has been able to successfully conclude 15 trade agreements that cover 51 countries while preserving Canada's supply management system”. The official went on to say:

If we were to start from the position that we would not be dealing with 100% of the items that we would negotiate on, it does risk having an agreement that's not necessarily completely beneficial to Canadian exporters and producers and it does risk being an agreement that does not necessarily provide the full economic benefits to Canada that one might have expected.

What was true when it was said two years ago remains true today. Bill C-282 is a solution in search of a problem, and it risks undermining other industries and sectors of the economy, including Canadian canola. Passing Bill C-282 will set a dangerous precedent for additional amendments to the Department of Foreign Affairs, Trade and Development Act, to either protect certain industries or mandate restrictive language in trade agreements in specific areas of interest.

Regarding the second challenge mentioned, Bill C-282 will significantly diminish Canada's desirability as a country with which to pursue trade negotiations. By legislating that our negotiators are not able to include supply management as part of the negotiations, Canada is significantly shrinking the trade prospect pie and potentially forcing Canadian concessions in other areas of interest. If Canada is viewed as an obstacle for new entrants to plurilateral agreements, or less attractive to engage with—given our legislated red line on supply management—our trading partners may question the value of having Canada at the negotiation table.

To conclude, Bill C-282 represents a significant departure from Canada's principled, fair and rules-based free trade posture. No industry, sector or issue should be off the table during trade negotiations. Our trade negotiators have delivered tangible results and benefits for the Canadian economy and industries, including canola.

[Ian McFall, Chair of the Board of Directors, Canadian Poultry and Egg Processors Council]

Thank you, Ms. Chair.

Good afternoon. Thank you for the invitation to appear before the committee.

My name is Ian McFall, and I chair the board of directors of the Canadian Poultry and Egg Processors Council. While I’m here as the chair of CPEPC, I’m also the executive vice-president and family shareholder at Burnbrae Farms, a family-owned company with egg grading, processing and farming operations in five provinces across Canada.

I’m joined here today by our association’s president and CEO, Jean-Michel Laurin.

CPEPC represents Canadian hatcheries, egg graders and processors, chicken and turkey processors, and further processors. While our members are not supply-managed, you can see us as representing Canadian poultry and egg farmers’ main customers. Collectively, our membership represents more than 180 establishments of all sizes, and processes over 90% of the poultry and egg products raised by Canadian farmers.

Our association strongly supports Canada’s supply management system and international trade policies that are consistent with the system. We believe Bill C-282 is consistent with that system.

The poultry and egg supply chain that we represent, the people we employ and the communities we touch depend on ensuring that we have a strong supply management system in Canada. The market access granted for poultry and egg products through CPTPP and CUSMA, in addition to the existing market access through WTO, will have an impact on supply-managed producers and processors. It is worth noting that our industry is still adjusting to the escalating impact of these agreements. For instance, in the case of CPTPP, Chile just ratified the agreement. It also just banned poultry exports due to avian influenza.

For these agreements, it is worth noting that the government is providing financial compensation to supply-managed sectors. In the case of poultry and egg processors, the government is contributing to plant investments through the supply management processing investment fund. This fund will provide, on average, $17 million per year over six years to poultry and egg processors looking to increase their productivity and improve their competitiveness. This fund is in high demand. After being in place for almost a full year, it is now clear that it will benefit only some processors given the high volume of demand for this fund. It is also worth noting that the funding allocated under this fund represents a fraction of the expected impact of the trade agreements.

Bill C-282 is tied to Canada’s import controls regime. This is one of the three pillars that are key to upholding the supply management system. We acknowledge that some have concerns with the bill. Trade agreements are critical to non-supply managed commodities. We believe Canada can protect its supply-managed sectors while successfully negotiating trade deals that benefit Canadians. It is also our understanding that it is not the intent of the bill to restrict Canada’s ability to negotiate new agreements.

Access to imports in controlled and limited volumes for our members is also critical to supply-managed sectors. It is our understanding that Bill C-282 will not change the market access already granted to trading partners under current agreements or impact other trade legislation.

In closing, CPEPC believes this bill is consistent with Canada’s supply management system, a system that we strongly support.

We thank you for your time and would be pleased to answer your questions.

[Tim Klompmaker]

Bill C-282 will give people the confidence to invest in farms. It'll give the confidence for them to start up smaller farms. Certainly, with smaller farms, we do have the advantage of.... With supply management, we have very rigorous food safety and animal care programs. That goes across all of our farms, so it does maintain those small family farms.

[Wilson Miao, Liberal, Richmond Centre, BC]

With the implementation of Bill C-282, will it adequately address the concerns and needs of small-scale chicken farmers across Canada?

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you.

I would like to thank the witnesses for being with us today and I also want to apologize for our tardiness. When we have votes, it's never easy for our witnesses.

Mr. Ruel, do you think Bill C‑282 is necessary or is compensation enough?

[Joe Dal Ferro, Chair, International Cheese Council of Canada]

Good afternoon. My name is Joe Dal Ferro, and I'm the chair of the International Cheese Council of Canada. I am joined by Helen Dallimore, representing one of our associate members, Coombe Castle.

The ICCC was founded in 1976. We are an association of small and medium-sized cheese importers and their suppliers. Our members are Canadian-based importers of cheese. Our associate members include cheese producers and processors from various countries that have international trade agreements with Canada.

The ICCC has coexisted with Canada’s supply-managed dairy sector for over four decades and accepts the rationale underlying Canada’s supply management system. We are not advocating for its dismantling. Rather, we are continuing to work with the government to ensure that its TRQ allocation and administration system respects our trade commitments in the dairy sector. Moreover, many of our members, including my company, are proud to be distributors of domestic cheeses across all over Canada.

I am here today to offer the committee several compelling reasons why Bill C-282 should not be supported by parliamentarians.

First, parliamentarians must seriously consider the significant negative financial impacts that this bill will have on the many Canadian small to medium-sized businesses that import cheese. The future for Canadian importers of cheese is already uncertain. This bill is only adding to the unpredictability. The unknown outcome of Global Affairs' TRQ phase II review—which initially started in 2019—is creating ambiguity and inhibiting business planning. Moreover, it may require importers to significantly change their business methods and model if the new quota policy is unfavourable to our industry.

If Bill C-282 becomes law, it risks obstructing even the possibility of addressing the market access requested by the U.K. as part of the ongoing bilateral negotiations. If the U.K. is forced to settle for a portion of the WTO non-EU quota, Canadian importers will be limited to exclusively using this method of access to import British cheeses. This pool is already fully utilized with cheeses from the U.S., New Zealand, Switzerland and Norway, among others. Otherwise, they will find themselves faced with three options, all of which will result in financial harm to Canadian businesses.

These are the three unappealing options. The first is ceasing to import U.K. cheese products altogether in Canada, meaning that many Canadians’ beloved British cheeses could be gone forever. The second is substituting some of their imports from other non-EU countries with imports from the U.K., ensuring a shortage of available cheeses from multiple jurisdictions. The third is importing U.K. cheese with the prohibitive 245% tariff. This would nearly triple the cost of certain cheeses already on the market and make them unaffordable to all but the richest of Canadians. In this era of rising inflation, parliamentarians don’t want to forcibly make imported cheeses an even more expensive proposition.

All of these unfortunate scenarios unfairly penalize Canadian businesses, despite the increasing demand by Canadians for British cheeses. Businesses' ability to meet this demand at an affordable price will be severely constrained if this bill passes. Not only will these Canadian businesses be prevented from generating market growth, but they will almost certainly lose business, which will mean job losses in Canada.

Let me be clear. The CPTPP is not a solution for Canadian importers of British cheeses.

Based on these facts, we are also concerned that Bill C-282 could have a dramatic impact on our trade relationships. Our trade allies have shown increasing dissatisfaction with the administration of Canada’s dairy TRQs—so much so that two of our trade partners have already launched trade disputes, alleging that Canada is failing to respect its existing trade agreements.

For these reasons, the ICCC respectfully urges members of this committee to consider the consequences of this bill and to vote against Bill C-282.

Thank you.

[Tim Klompmaker, Chair, Chicken Farmers of Canada]

Thank you, Madam Chair.

My name is Tim Klompmaker. I'm a chicken farmer from Norwood, Ontario, and chair of Chicken Farmers of Canada. Supply management is the reason why I am a farmer. My parents took over the farm from my grandparents in 1972, and supply management was the reason why they encouraged me to purchase my own farm in 1984.

My wife and I raised three sons, who are now also chicken farmers thanks to supply management. It is a uniquely Canadian system that supports generations of farmers and feeds millions of Canadians. We're all here to talk about the same thing. Whether we're government officials or members of the Canadian Federation of Agriculture or other farm groups, we're all worried about the same thing: How do we continue to provide safe, high-quality food to feed people? We're all unified in the fact that farmers feed Canadians and the world. We require the tools and support to continue doing so in our own unique ways.

Bill C-282 is welcomed by Chicken Farmers of Canada. It would ensure the Government of Canada grants no further concessions in the supply management sectors in any future trade deal. We cannot afford to lose part of our market with every trade agreement. The Chicken Farmers of Canada board of directors, comprising farmers, processors, further processors and members of the food service sector, carefully determines how much chicken Canada needs for the coming months, and farmers from coast to coast produce that amount. It also considers how much is coming from imports, making it predictable and reliable. Any additional access granted undermines the import control pillar of the system, meaning it can't function as intended.

I can't stress this enough: If supply management is weakened, the Canadian chicken sector cannot guarantee safe, local chicken raised with care for Canadians, threatening food security in all 10 of the provinces in which we operate. Supply management allows our sector to enforce mandatory, audited food safety and animal care programs under the “raised by a Canadian farmer” brand. These enforcement measures are of particular importance during outbreaks of animal diseases like avian influenza, as we are seeing now. Guaranteed food safety and animal care programs are some of the many reasons why supply management works.

With headlines stating that food security is at risk due to weather events, disease and global conflict, the last thing we want is for consumers to fear there will be no food to feed their families. A supply-managed farmer's job, first and foremost, is providing food for Canadians. Every time Canada enters trade negotiations, this ability to provide is at risk. Trade is important to our country, but it should not harm supply management, particularly given that Canadian chicken production is only 1.3% of world chicken production.

Recently, the CPTPP and CUSMA trade agreements have significantly impacted Canadian chicken farmers. We have never stood in the way of Canada achieving a fair deal. Our sector provides stability at home, while sectors with greater export potential can pursue opportunities in international markets. We also note that most countries have sensitive sectors they wish to protect. For example, New Zealand has strict biosecurity laws that impose extreme cooking requirements on imported poultry products.

By adopting legislation that ensures no further access to supply management is granted in any future trade agreement, parliamentarians will show Canada's dairy, poultry and egg farmers that they stand by them, just as we have always been there for Canadians.

Supporting this bill is not bad trade policy. It is good domestic policy. Supply management means looking out for Canadians.

[Roger Chevraux, Chair, Canadian Canola Growers Association]

Thank you for the opportunity for the Canadian Canola Growers Association to appear on your study of Bill C-282. We appear in opposition of the bill.

I am joining today from Killam, Alberta, where our family farm, Century 12 Farms, grows cereals and oilseeds. I also serve as the chair of both Alberta Canola and the Canadian Canola Growers Association, known as the CCGA. I'm joined by Rick White, CCGA's president and CEO, who's based in Winnipeg.

I mentioned the name of my farm because it tells you about our family farm. My great-grandfather started farming on the land in 1912, which makes ours one of the oldest farms in our region of the Prairies. This makes me a fourth-generation farmer and makes my 27-year-old son a fifth-generation farmer.

CCGA represents Canada's 43,000 Canadian farmers on issues that impact their success. Canola is the number one revenue source, earning Canadian farmers $13.8 billion in revenue in 2022. That's more than cereals, horticulture and livestock, including dairy and poultry. It contributes roughly $30 billion in annual economic activity and creates over 200,000 jobs nationally.

Canola's success and its contribution to our economy is based on innovation, international trade and the series of free trade agreements successfully concluded by the government. As the world's largest producer and exporter of canola, Canada represents 90% of what we grow as seed, oil and meal, which were valued at $14.4 billion in 2022.

Free trade agreements eliminate barriers and provide clear rules of trade, providing predictability and stability and reducing market risks. For example, the North American Free Trade Agreement, now the CUSMA, spurred development of the Canadian canola sector in growing acres, attracting value-added activities and generating the innovation needed to grow a sustainable crop and to be partners in Canada's climate change commitments. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership diversified market opportunities for oil and meal, keeping the processing at home and generating a multiplier effect in rural areas as well as urban centres.

I want to state up front that I am not opposed to supply management or to the concept of protecting it. However, I am opposed to this bill because it is a bad policy that is not necessary, I believe, to protect our supply management system.

Bill C-282 is bad policy on many fronts.

First, if passed, Canada's attractiveness as a free trade agreement partner would diminish, which would adversely affect Canada's ability to launch and enter into new negotiations. Canada's leverage in successfully renewing the CUSMA under President Trump or in negotiating a membership to and conclusion of the CPTPP agreement would have been greatly diminished if such a bill were in place.

Second, the bill would constrain negotiators' ability to seek the best and most ambitious deal for Canada as a whole. According to the department's website, Canada is negotiating bilateral or regional FTAs with a dozen partners, as well as advancing World Trade Organization modernization and renewal of the Agreement on Agriculture. Robust negotiating strategies, flexibility and compromise are required to achieve successful conclusions. This fact was acknowledged during the department's testimony on February 16 regarding the CUSMA.

Third, the bill creates a dangerous precedent that invites our trade partners to also seek exclusions and undermines Canada's reputation globally. CCGA supports ongoing government efforts to diversify our exports and strengthen free trade worldwide. This bill contradicts those efforts and sends a strong protectionist signal globally at a time where it has never been more important to avoid new trade barriers and to discourage trade and/or access to food.

Canada needs a new agriculture trade strategy where FTAs are a central trade policy tool. The Indo-Pacific strategy commits $2.3 billion over the next five years to expand our political, economic and security relationships with the Indo-Pacific region, including through FTAs with Association of Southeast Asian Nations, India and Indonesia. Countries that are developing their—